Sunday, January 20, 2008

The 2008 American Consumer Preview part 4

From my email came this report on retail for 2008:

WSL Strategic Retail Previews How America Shops - 2008

"Today's retailing world is chaotic and confusing, as evidenced by Holiday 2007 retail sales results," Wendy Liebmann, CEO of WSL Strategic Retail told an audience at a presentation at the National Retail Federation (NRF) Big Show at the Jacob K. Javits Convention Center in New York.

In previewing How America Shops-2008-Anarchy, the 11th bi-annual shopper study from New York City-headquartered retail marketing consultancy, WSL Strategic Retail, Ms. Liebmann continued, "2008 sets the stage for the future of retail: full of contradictions, full of new roles where retailing's best practices are no longer relevant. American shoppers want what they want, where they want, when they want it. It's anarchy! There's a new shopping structure and cycle at hand."

This anarchy is a result of the difficult time in which American shoppers currently live -- a time that had been defined by six years of unforeseen, unpredictable and highly unexpected factors: the first attack ever on mainland American soil (September 11), the collapse of major US corporations (Enron, MCI, World Com, Arthur Andersen), the loss of credibility of religious institutions, on-going wars, natural disasters such as Hurricane Katrina, on- going threats of terrorism and assassinations, the everyday seesawing of gas and oil prices and, the last straw, the mortgage market collapse.

As a result of this, key findings of the Study revealed:

-- ANARCHY REIGNS -- Americans face a crisis of confidence everywhere they turn. They cannot control the big things such as oil prices, falling home values and mortgage costs and rising property taxes, so they want to control the small things. So they are watching what they spend on everything.

-- PRUDENCE REMAINS -- Shoppers are cutting back on their shopping trips and the categories that they buy. Across the board shoppers are cutting back on almost everything. Except for food and their pets, all other expenditures are considered discretionary and therefore dispensable.

-- MIDDLE AMERICA SHUDDERS -- The middle class is shopping more like lower income shoppers. Middle market supermarkets and department stores are being squeezed because shoppers can get a lot more for less at big box stores and smaller, well edited stores are easier to shop.

-- NEW VALUES EMERGE -- Shoppers have become comfortable with their choices to buy less and only what they can afford. Much of the designer craze is over. This is manifest in other trends such as eating healthier; charitable disposal of old clothes, furniture through donations, recycling or resale, and using ecofriendly products -- light bulbs, energy saving appliances and biodegradable packages. Negating increased shopping and acquisition, consumers are disposing of things as they acquire fewer new things. Consumers will not be buying more of what they already have. It must be really new and exciting to justify the purchase.

-- TRUST WHO? -- NOT YOU -- With so much information available through blogs, shopper ratings web sites, authorities such as Consumer Reports,, one would think consumers would have information overload. Not so, they are tapping into everything, everywhere to make sure that they are making responsible, economically correct buying decisions. They will not rely on a retailer or manufacturer's own information or store associates. In fact, they don't trust them very much at all.

-- WINNERS AND LOSERS APPEAR ... FOR THE MOMENT -- The momentary winners are department stores as they return from the dead. Middle income shoppers now have JC Penney and Kohl's. High income shoppers have Saks, Neiman Marcus and Nordstrom. Macy's remains a big question. Drug stores redefine themselves with better brands and better service and as a result are attracting more shoppers. The losers are the mass merchandisers such as Target and Wal-Mart because shoppers are cutting back weekly shopping trips factor. Also because of the impact of fewer trips "losers on the verge" are specialty stores like Starbucks and booksellers like Barnes & Noble.

How America Shops-2008 was conducted on-line between October 25, 2007 and November 1, 2007 among 1600 consumers, 1300 women and 300 men, drawn from a nationally representative sample.

(Source: Retail Merchandiser, 1/15/08)

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